If you’ve just bought an apartment or townhouse in Melbourne, you’ve probably noticed a separate charge called “Owners Corporation fees” (sometimes called strata fees or strata levies).
Owners Corporation fees are regular and compulsory contributions paid by lot owners to cover the maintenance, insurance, and management of common property under the Owners Corporations Act 2006 (Vic).
Understanding what your 2026 OC fees actually cover can help you assess where your money is going and whether your building is being managed effectively.
Key Takeaways:
- Owners Corporation fees fund the essential running, maintenance, and insurance of your building’s common property.
- Fees are based on lot liability and approved annually through the AGM budget process.
- Tier 1 and 2 buildings must have a maintenance plan and maintenance fund.
- A well-prepared budget and properly managed funds help prevent unexpected special levies and financial stress.
What are owners corporation fees and what do they cover?
In Melbourne, owners corporation fees commonly referred to as levies are generally divided into specific categories, depending on your building’s size and obligations. These levies fund both the day-to-day running of the property and longer-term maintenance required under the Owners Corporations Act 2006.
Owners corporations are obligated to hold Annual General Meetings (AGM), and one of the critical items of business is the adoption and approval of the annual budget.
While the exact costs vary from building to building, most OCs issue levies to cover three main areas: administration, maintenance, and special levies.
Let’s break down what each of these typically includes in 2026:
Administrative fund levies/fees
The administrative fund covers recurring annual expenses, covering day-to-day maintenance of the building, including:
- common area cleaning
- gardening and landscaping
- utility bills for shared areas
- building insurance
- waste collection
- lift servicing
- security
- building management
- Owners Corporation management fees
In most Melbourne buildings, this is the largest recurring expense.
If insurance premiums rise or contractor costs increase, administrative levies usually increase too. For a detailed explanation of the market factors influencing these increases, read our guide on why Melbourne owners corporation levies are rising.
In a Caulfield case that we handled, the Owners Corporation was paying higher-than-expected management fees. By reviewing their service contracts and helping them transition to a more suitable management company, we were able to significantly reduce their administrative levies, showing just how much these fees can be influenced by the way an OC is managed.
If your owners corporation is unsure whether your administrative levies are reasonable, we can review your current arrangements and help identify potential savings, just like we did for the Caulfield Owners Corporation. Learn more about selecting qualified owners corporation management groups in Melbourne.
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Maintenance fund levies/fees
An owners corporation may establish a maintenance fund that is governed or guided by a maintenance plan. Contributions to the maintenance fund are intended to cover any future capital expenditure (CAPEX) of the building such as:
- exterior repainting
- rood replacement
- driver resurfing
- lift replacement
- major plumbing works
Owners Corporations in Melboune, under the Owners Corporations and Other Acts 2021 – which came into effect on 1 December 2021, are now defined into tiers:
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- Tier 1 – More than 100 occupiable lots
- Tier 2 – 51 to 100 occupiable lots
- Tier 3 – 10 to 50 occupiable lots
- Tier 4 – 3 to 9 occupiable lots
- Tier 5 – 2 lot subdivision or services-only OC
This new system also has implications as to how and when maintenance plans and funds apply to owners corporations.
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- Tier 1 and Tier 2 OCs must prepare and approve a maintenance plan.
- Tier 3 to 5 may choose to prepare and approve one, but it isn’t compulsory.
Maintenance plans can be amended by the Owners Corporation through the passing of an ordinary resolution.
Owners Corporation Act 2006
Act No. 69/2006
Part 3 – Financial Management
39. Report on an approved maintenance plan
The owners corporation must report to the annual general meeting in relation to the implementation of its approved maintenance plan.
Division 4 – Maintenance fund
40. Establishment of the maintenance fund
An owners corporation that has an approved maintenance plan must establish a maintenance fund in the name of the owners corporation.
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Special levies
Special levies are usually raised when there are insufficient funds in the administrative or maintenance fund of the owners corporation, or when unexpected expidenture arises that wasn’t included in the budget.
Owners Corporation Act 2006
Act No. 69/2006
Part 3 – Financial Management
(4) A special resolution is required when exercising power under sub-section(1) if the amount involved is more than twice the total amount of the current annual fees set under section 23.
How are owners corporation fees calculated?
Once the budget is approved at the AGM, the levies for each lot owner are calculated based on the lot’s liabilities (your building’s plan of subdivision and OC report can be obtained from landata or your owners corporation manager).
In Victoria, owners corporation levies are determined by each lot’s liability. However, there is the notion of the ‘benefits principle’ when it comes to maintenance – which isn’t always as straightforward in real-world application, and it’s an area that has been tested by various VCAT cases.
Section 49-Cost of repairs, maintenance, or other work of the Owners Corporation Act 2006 touches on this notion:
- An owners corporation may recover as a debt the cost of repairs, maintenance, or other works carried out wholly or substantially for the benefit of one or some, but not all, of the lots affected by the owners corporation from the lot owners.
- The amount payable by the lot owners is to be calculated on the basis that the lot owner of the lot that benefits more pays more.
- The works referred to in this section may be on the common property or a lot.
As a lot owner or Committee member, this is one of those areas where small misunderstandings can quietly turn into bigger issues.
If you’re unsure whether Owners Corporation fees are being calculated and applied correctly, you can have a brief conversation with a strata consultant here.
It can provide clarity and, where appropriate, guidance through a change in management that can result in clearer fees and fewer questions about costs.
Who sets owners corporation fees?
The Committee and the owners corporation manager will typically hold a budget planning meeting in the weeks before the AGM. For existing buildings, the annual budget will often be guided by the previous year’s actual expenses (as a starting point).
Section 23 of the Owners Corporation Act 2006 gives power to the owners corporation to issue levies:
Owners Corporation Act 2006
Act No. 69/2006
Part 3 — Financial Management
Division 1 – Financial Powers
23. Owners corporation may levy fees
1. An owners corporation may set annual fees to cover –
(a) general administrative; and
(b) maintenance and repairs; and
(c) insurance; and
(d) other recurrent obligations of the owners corporation.
2. If the owners corporation has an approved maintenance plan, the annual fees must include fees that are–
(a) designated for the purpose of the maintenance plan; and
(b) sufficient to allow the maintenance plan to be implemented.
3. The fees set must be based on lot liability.
4. The owners corporation may determine the times for payment of fees.
When are owners corporation fees paid?
The vast majority of Owners Corporations in Victoria collect owners corporation levies every quarter, i.e., the levies for the 1 January to 31 March will be issued in early December and due on 1 January.
Levies are issued by the owners corporation management company – based on the annual budget divided by the total lot liability multiplied by the lot liability for a given lot.
The Owners Corporation Act 2006 also sets out a defined process that can be followed for overdue and unpaid levies; the process, at a high level, entails the sending of the fee notice, a reminder notice after the due date if unpaid, a final fee notice, the application of penalty interest (where applicable) for unpaid levies, and finally notice of legal proceedings.
Common issues with owners corporation fees and financial reporting
Many Committees find it hard to stay on top of levies, budgets, and fee transparency, especially if their OC manager isn’t providing clear guidance. Confusion or poor reporting can lead to frustration, arrears, or unexpected special levies.
How we help Committees take control
We work with Committees to identify gaps in fee management and financial oversight. If your current OC manager isn’t meeting your needs, we can guide you through a smooth transition to a qualified, reliable manager from our vetted network.
Benefits of the right OC manager in managing oc fees
With the right manager, Committees gain:
- Clear explanations of levies and budgets
- Accurate financial reporting and planning
- Confidence that funds are managed responsibly
For expert support with OC fees or a manager review, contact one of our specialist Consultants on 03 9007 2618 or send us a message.
